Commercial Construction Financing
Entitled land, a real budget, a contractor ready to go — and a bank that wants two years of committee meetings. Construction lending is a specialty. Build with capital that knows how draws work.
Why construction loans are a different discipline
Ground-up construction is the most process-intensive lending in commercial real estate. The collateral doesn't fully exist yet, the money goes out in draws against completed work, and the lender is underwriting three things at once: the borrower's ability to execute, the contractor's ability to deliver, and the finished property's ability to carry permanent debt or sell. Banks do this reluctantly, slowly, and mostly for existing customers with deep deposits.
Everyone else — the investor building a small multifamily project, the owner-user building their own facility, the developer on their second deal — needs construction lenders who do this as a primary business. These lenders underwrite the budget line by line, manage draw schedules and inspections as routine, and structure interest reserves and contingency into the loan so the project isn't starved mid-build. They also think about the take-out from day one, because every construction loan is ultimately a bridge to permanent financing.
Why construction deals get stuck
What construction lenders look for
How Denali approaches construction deals
Denali Commercial Mortgage, founded in 2012 and based in Happy Valley, Oregon, in the Portland metro, structures ground-up and heavy-renovation construction financing with lenders who build as a core business. Our team's 40+ years of combined commercial lending and finance experience means your budget, timeline, and contractor get a serious review — not a committee's shrug.
We package construction files the way construction lenders underwrite them: entitled land, a defensible budget, a vetted contractor, and a take-out that holds up. Owner-users building their own facility can often pair construction with SBA or owner-occupied permanent debt in a construction-to-perm strategy; investors typically bridge to conventional take-outs. Every transaction receives individual review, and terms are quoted per deal — request current terms for your scenario.
How It Works
- 1
Get Qualified
- 2
Consultation
- 3
Documents
- 4
Review
- 5
Term Sheet
- 6
Underwriting
- 7
Conditions
- 8
Closing
Common Questions
How much equity do I need for a construction loan?
Most construction lenders fund 70-80% of total project cost, with the borrower contributing the rest. Land you already own often counts toward equity at its current appraised value, not what you paid for it — which can substantially reduce the cash you need to bring.
How do draws work during construction?
The lender funds the budget in installments as work completes, verified by inspections — foundation, framing, mechanicals, finishes, and so on. You pay interest only on funds actually drawn. A well-run draw process pays the contractor on a predictable cycle; a slow one stalls the job, which is why the lender's operations matter as much as their terms.
Can I build on speculation, without a pre-lease or buyer?
Spec construction gets financed, but conservatively — lower leverage, stronger feasibility requirements, and a market study the lender finds persuasive. A pre-lease, pre-sale, or owner-occupancy materially improves both the leverage and the pricing available to you.
What happens when construction finishes?
The construction loan is replaced by permanent financing — the take-out — through a refinance once the property receives its certificate of occupancy and, for income properties, begins to lease up. We structure the take-out path when the construction loan is placed, not when it's maturing, so you're never holding short-term debt without an exit.
Tell us about your deal. We will tell you what fits.